3.

WHETHER THE FSAs VIOLATED PROVISIONS OF SECTION 4 OF THE ACT,

INDIVIDUALLY(ON PART OF TRIMATO AND/OR AS PART OF SINGLE ECONOMIC
ENTITY)?

It is submitted that the relevant market in the present matter is the market for the Food Services
Aggregators (FSAs). Trimato is not only FSAs in the relevant market and hence, possesses
limited market share. Therefore, they do not exercise a position of dominance in the relevant
market. Moreover, the Trimato has not abused its position of dominance as they have not
imposed discriminatory pricing, or used their position in the market of the FSAs to leverage their
position in the downstream as well as the conventional market. Moreover, Trimato’s conduct did
not lead to the denial of market access.

3.1. THAT THE FSAs DID NOT CONSTITUTE SINGLE ECONOMIC ENTITY.

3.1.1. The appellant contends that the FSAs(Trimato, Ziggy, NomRhino) did not constitute a
single economic entity. In the present case, the iron bank has an investment of 15%, 5%, and 8%
respectively in Trimato, Ziggy and NomRhino, with a board seat in each1.
3.1.2. In the case of Kapoor Glass Private Limited v Schott Glass India Private Ltd.2, It was held
by the court that in order to determine Single Economic Entity, inter alia, factors like legal
control, single-center of decision making, unity in economic decisions and exercise of decisive
influence has been considered. It is evolved from the concept of holding company and
subsidiaries as given in Companies Act, 2013. Subsidiary companies are those in which holding
company can exercise control in the composition of the Board of Directors and exercises or
controls more than one-half of the total share capital3.
3.1.3. In the instant case, the IronBank shareholding is only 15%, 5%, and 8% in these three
FSAs and it is a minority shareholder with a board seat in each of the FSAs and this does pass
the criteria imposed by the Companies Act,2013. In the Judgement of Fuji Electric Co.Ltd v
Commission4, It was held by the General Court, that the minority shareholder Shareholding, the
representation on the board of the directors of the company, the ability to influence the Business
policy and actual evidence of attempts will be relevant, also in the same judgment, It was held
that to exercise decisive influence that 30% of minimum shareholding is required.

3.1.4. Further, in the present case, the shareholding of the IronBank is not even 30% if we
combine all three FSAs.The U.S. Supreme Court in Copperweld Corp v Independent Tube Corp
5
held that parent-corporation and its wholly-owned subsidiary would be considered as Single
Economic Entity.Also if subsidiary has no independent authority to take any decision on its own

1 Proposition 7
2 CCI March 29,2012
3 Section 2(87), Companies Act,2013
4 (2011) ECR-II-4091
5 467 U.S. 752 (1984)
and they are out and out guided only by holding company, would be in a position to hold that
subsidiary and holding company constitute a single economic unit6
3.1.5. In the Present case, The IronBank has not minimum required shareholding for decisive control 7
and neither the report of the DG nor the VAR Report has any evidence that IronBank is acting as Single-
centre for the decision making for all three FSAs and it has only 1 board seat in three FSAs which is not
enough to influence the decision of all the FSAs.
3.1.6. Thus ,it is submitted that Trimato,Ziggy and NomRhino cannot be termed as single economic entity
only due to commom shareholding of IronBank.

3.2 DETERMINATION OF THE RELEVANT MARKET.

3.2.1.It is humbly submitted that Section 2(r) of the Act 8 defines “relevant market” as “the market which
may be determined by the Commission with reference to the relevant product market,” Further Section
2(t) of the Act defines “relevant product market” as “a market comprising of all those products or services
which are regarded as interchangeable or substitutable by the consumer, by reason of characteristics of
the products or services, their prices and intended use;

3.2.2. The ascertainment of the relevant market is essential for analysing a case of abuse of dominance 9
The dominant position of an enterprise or a group within an identified ‘relevant market’ has to be
established first10 When determining what constitutes the relevant market, due regard must be given to
both the relevant product as well as geographic market 11.
3.2.3. All those products or services which are regarded as interchangeable or substitutable by the
consumer form part of the same relevant product market 12. Relevant product market is primarily
determined by gauging product substitutability from a consumer’s perspective 13 In the instant case, the
relevant product is the service provided by the Trimato. Here it is necessary to differentiate between the
upstream market where foods are cooked, from the downstream market of the conventional restaurants 14

3.2.4.The appellant would further put reliance on the judgment of Aberdeen Journals Ltd. v Director
General of Fair Trading15 in which it was clearly held that a relevant market shall be decided strictly
depending upon the facts of the case. In the present matter, the relevant market is the service provided by
the FSAs and the regular restaurants and the relevant product is Food provided to the customers.
6 Samayanallur Power Investment (P) Ltd v Covanta Energy India(Balaji) Ltd,2005 SCC Online Mad 619
7 Supra 4
8 The Competition Act,2002
9 Prints India v Springer India Pvt.Ltd, Case 16/2010 ¶9 (CCI)
10 Explanation 2, §4(2), Competition Act, 2002
11 §19(5), Competition Act, 2002
12 §2(t), Competition Act, 2002
13 F.Wijckmans & F.Tuytschaever, Vertical Agreements IN EU COMPETITION LAW.106, (2nd edn.,
2011).

14 Samsher Kataria v Honda Seil Car India Ltd. AND Ors ,Case no. 3/2011,, ¶19.4 (CCI)
15 : [2003] CAT 21 ,Case no. 1005/1/1/01
Therefore, Trimato is not only FSAs in the relevant market. In the present case, it must be brought to the
notice of the Tribunal that the relevant market consists of Foodservice aggregators as well as the
Vormirian Association of Restaurants keeping in mind the nature of the services which both of them
provide. Both of them are the same service providers but only the medium of providing the services are
different. One provides the service of delivering the food from the marketplace to the customers whereas
the latter provides services only when a customer walks into their place. Further, it must be brought to the
notice of the tribunal that even the FSAs get their product from the restaurants which are same as to the
Vormirian Association of Restaurants. A better explanation in this regard can be sought from a broader
classification of the nature of FSAs services where they can be termed as a mere extension of delivery
services of the restaurants. Thus, creating a seperate marketplace for FSAs and VAR would practically
mean to distinguish between the walks in sales and delivery sales of the same restaurants.

3.2.5. The ‘relevant geographic market16 should also be taken into consideration to identify the
relevant market17. CCV should pay due regard to the factors such as the price of goods and
service18consumer preferences19 inter alia while identifying the relevant geographic market. The
geographic market for the FSAs usually defined on the basis of national or linguistic criteria and is
therefore national in scope. This is primarily due to the differences in the regulatory regimes, language
barriers and other conditions of competition prevailing in the different nations and While determining the
relevant geographical market, one of the factors that Tribunal should pay regard is the local specification
requirement. From the facts, one could find out the business of FSAs has spread to the whole of the
Vormir and also 90% of the market share is held by these three FSAs that are i.e, Trimato, Ziggy and
NomRhino in the FSAs market in Vormir. These factors suggest that the relevant geographic market for
FSAs is not limited to any particular region(s) but to the whole of the Vormir.

3.2.6. The relevant product market comprises all the products which are perceived to be substitutable by
the consumers by the reason of the products’ basic characteristics and intended use. The products, to be
part of the same market, not need to be perfect substitutes. In the present case, the customers have option
substitutes for Trimato such as Ziggy that constitute the relevant product market of FSAs.
Thus, the geographic relevant market should be restricted to the Vormir.

3.2.7. Therefore, it is submitted that the market of FSAs is the relevant market in Vormir.

3.3. Trimato did not exercise a position of dominance in the relevant market

16 §2(s), Competition Act, 2002

17 §19(5), Competition Act, 2002
18 §19(7), Competition Act, 2002
19 §19(6)), Competition Act, 2002
3.3.1.It is submitted that Section 4 of the Act defines “dominant position” as, “a position of strength,
enjoyed by an enterprise, in the relevant market, in India, which enables it to: (i) operate independently
of competitive forces prevailing in the relevant market; or (ii) affect its competitors or consumers or the
relevant market in its favour.”

A. Trimato did not Function Independently in the relevant market.

3.3.2.In the present matter, the relevant market is the food service provided by the Trimato and others
FSAs as well as by the regular restaurants.
It is an established principle that a firm would be able to behave independently of competitive forces if it
has acquired a position of economic strength20. This position of economic strength can be understood to
be one of the substantial market power21. Here Trimato did not function independently in the relevant
market due to the presence of the other FSAs and regular restaurants and also each of them has a limited
market share of their own.
It is also alleged that Trimato and Ziggy with their newly formed cloud kitchens leverage their interest in
the downstream market as well as in the conventional market of the regular restaurants. However, the
Expansion of the business from one relevant market to other is cannot be termed as abuse of dominance 22
and also Trimato is not functionally independent of any competition as there are several other players
such as Ziggy as well as regular restaurants are present.
Hence each FSAs and regular restaurants have limited market share and Therefore, It is Submitted that
Trimato cannot function independently of the Competitive forces prevalent in the market.

B.Trimato cannot affect Consumers,Competitors or the Relevant market in the its favour.
3.3.3.It is humbly contended that an enterprise should have the ability to engage in a conduct
that excludes competition or prevent entry of the new comers into the relevant market and
should be unable to influence the relevant market in its favour23. Here in this case, Trimato did
not involve in any activity that exclude competition or prevent entry of the new comers and also
there is five or six FSAs exist in the market along with the Trimato24

20 United Brands Co. v. Commission, 1978 ECR 207, ¶65 (ECJ) [hereinafter, United Brands]; Hoffmann-La
Roche & Co. AG v. Commission, 1979 ECR 461, ¶4 (ECJ)
[hereinafter, Hoffmann].

21 Guidance on Article 102 Enforcement Priorities in Applying Article 82 EC Treaty to Abusive Exclusionary
Conduct by Dominant Undertakings, OJ 2009 (C 45)7, ¶10 [hereinafter, Enforcement Guidance]; Art. 102, TFEU.
Page | 6

22 Abir Roy, Competition Law in India,(3rd edition)

23 BBI/Boosey and Hawkes:Interim Measures,1987 OJ (L 286) 36,¶18 (EC)
[Hereinafter,Boosey]
24 Clarifications ¶ 5
3.3.4.Additionally,any anti-competitive practices by the Trimato will not affect the consumers as
there are other Substitutes available to the consumers in the identified market.The buyers have
contervailing buying power because of the competitive market25.
In Conclusion,It is submitted that the Trimato does not hold a dominant position in the relevant
market. Therefore,Trimato cannot held liable for violation of Section 4 the Act.

3.43.2.Trimato is not abusing its dominant position under Section

4(2)(a) of the Vormiran competition act,2002.
3.2.1 The appellant humbly submits that without prejudice to the above contentions, Section 4 of the Act
prescribes types of conduct that will be considered abusive if carried out by a dominant enterprise. In the
instant case, it is contended that Trimato’s conduct was not in violation of (i) Section 4(2)(a), (ii) Section
4(2)(c), and, (iii) Section 4(2)(e) of the Act.
3.2.2. It is submitted that Section 4(2)(a) of the act prohibits the (a) unfair or discriminatory condition in
the sale of goods and services and,(b) unfair or discriminatory price in the purchase of goods or services.
The explanation for Section 4(2) (a) states that any discriminatory or unfair pricing or condition imposed
“shall not include such discriminatory condition or price which may be adapted to meet the competition.
3.2.3. In the present Matter, the Trimato have entered into a double-sided agreement with (a) the
restaurants who list their food products on its platform; (b) and the customers who order food products
from its platform. The purpose of entering into the agreement is to tap into the growth of the Vormir’s
FSAs which helps restaurants to increase their target audience and it helps the Trimato to increase its
profit, also it contributes to the growth of the economy of the Vormir 26
3.2.4. It is alleged by the VAR that Trimato is charging excessive commissions from its partner
restaurants, while the newly formed cloud kitchens that are owned by Trimato are not being charged the
same commissions27. It is submitted that the less commission charged by the Trimato from the newly
formed cloud Kitchen is not discriminatory as these cloud kitchens are newly formed, in order to survive
in the market and build its consumer base, it is important to charge less commission from these cloud
kitchens28. These kitchens have just been introduced in the market and can’t be charged with the same

25 Saurabh Tripathy v.Great Eastern Energy corp.Ltd , Case No. 63/2014, ¶18 (CCI)
26. Proposition ¶ 2
27 Proposition ¶ 7
28 New e-commerce report,2019
amount of commission that is charged from the already established restaurants. Further, in the case of
Ashish Ahuja v Snapdeal29, it was clearly held by the CCI that the e-commerce in India is still in its
infancy and in order to sustain and gain buyers and to establish a position in the market, there is need to
charge less commission. Further, the allegation of charging less commission from cloud kitchens is only
directed towards Trimato which is unfair, as the similar strategy is used by the other restaurants and in
order to meet competition in the market, Trimato is forced to adopt the same strategy and its comes within
the ambit Meeting competition defense. The ECJ in United Brand 30s, case acknowledged the right of any
firm, even those in dominating position, to take action in protecting its commercial interest.
3.2.5. It is contended although Trimato in the present case, has a market share of 60% from the past 11
months31, it has not abused its dominant position in the relevant market. The term unfair has not defined
anywhere in the Act32 and it has to be examined in the context of unfairness in relation to customers and
competitors33. In the explanation of Section(4)(2)(a) it is mentioned that predatory pricing is the subset of
unfair pricing34. Predatory pricing takes place when an enterprise intentionally lower the price of its
product with an intention of eliminating the competitor 35 or have an appreciable adverse effect on the
competition in India as It is inferred from the facts of the case that Economy of the Vormir is Booming at
significant rate and there is not any evidence put forth by the DG as well as the informant that practices of
Trimato are causing appreciable adverse effect on competition in Vormir and also it is not inferred from
the conducts of the Trimato that its conduct is causing elimination of any FSAs from the market.
3.2.6. The report of the DG, as well as the informants, have also not put forth any evidence with respect to
the possibility of recoupment. The rationality for a recoupment rule is that without recoupment, even if
predatory pricing causes the target painful losses, it produces lower aggregate prices in the market, and
consumer welfare is enhanced and. Hence it is contended that in order to crystalize any liability on the
Trimato under Section 4 of the act it is important to establish that the Trimato would be able to recoup
any loss suffered during the predation36.

3.2.7. Therefore, any price or condition adopted by the FSAs is not in contravention of section 4(2)(a) and
it has adopted to meet the market condition.

3.2.8 It is contended that the Trimato cannot be held for denial of market access under Section4(2)(c) of
the Act. Denial of market access is conduct by dominant enterprises which led to the foreclosure of the
market access or defer entry of new player in the market 37
3.2.9 The U.S Case of Dentsplay38 held that there should always be scope for a rival to access the market
on a scale sufficient to be a viable competitor. In the instant case,Trimato, although it has a market share
of 60% from the past 11 months charging less commission from the newly formed cloud kitchens, is not

29 13 CCI ,Case No. 17 of 2014

30 United Brands Co. v Commission (1978) ECR 207
31 Proposition ¶ 7
32 MCX stock exchange v NSE India Ltd, 2011 SCC online CCI 52
33 Ibid
34 Supra 29
35 Newmann v Reinforced Earth Co.F2D 424 (SC Cir 1986)
36 Brooke Group Ltd v Brown & williamson Tobacco Corporation, 509 U.S. 209 (1993)
37 Sh. Dhanraj Pilay & ors. v. M/S Hockey India, Case no 73 of 2011
38 United States v. Dentsply International,Inc 399 F.3d 181 (3rd Cir. 2005)
discriminatory, and it is important for the promotion as well as establishment of the cloud kitchens in the
market.
3.2.10. In the case of Snapdeal39, the CCI observed that distributed circulars only clarified that the
warranty services offered by the manufacturer were limited to those products brought from its authorized
distributors, genuine spare parts and services of the same. The CCI further stated that “the conduct of
SanDisk in issuing such circular can only be considered as part of normal business practice and cannot be
termed as abuse of dominance”.Moreover, Ziggy and NomRhino has market share of 30% and rest 10%
is shared between two or three FSAs which shows that there is no foreclosure of markets for the new
entrants and also there is no evidence put Neither by the VAR nor any prima facie evidence found by DG
which led to conclude that there is denial of market access.
3.2.11. Further, It is inferred from the facts of the case,that Trimato is holding 60% market share from the
past 11 months40 Also there exist 3 to 4 more FSA apart from Trimato and if going by the respondent
allegation that there is a denial of market access by Trimato by abusing its dominant position then these
remaining FSAs by now should have left the market but that’s not the case here. Instead all these FSAs
are competing within themselves.
3.2.12 In JSW Paints Private Limited Vs. Asian Paints Limited 41 it was observed that Asian Paints has
denied access to necessary distribution channels in the relevant market and has limited the availability of
alternate products in the relevant market for consumers thereby reducing the competition in the market in
contravention of provisions of Section 4(2)(c) of the Act. As a result of the conduct of Asian Paints, the
final consumers may also be deprived of the choice to purchase different kinds of paints at competitive
prices. But in the present case, Trimato has never indulge itself in activity or practices which led to denial
of market access to the remaining FSAs and also it means that Customers are preferring Trimato over
other FSAs and it should not be alleged that it affect market and lead to denial of market access under
Section 4(2)(c)42.
3.2.15. It is humbly submitted that Trimato is unable to affect its competitors in its favor as the Ziggy
along with other restaurants are offering competitive pricing. Further, they are constrained by the need to
retain customers . Therefore, it is submitted that the Trimato is not the dominant enterprises in the
relevant market and not violating Section 4(2)(c)

3.2.15.Therefore,Trimato cannot be held liable for the Violation pf Section 4(2)(e) of the act.

39 Supra 26
40 Proposition ¶ 7
41 CCI, Case 36 of2019
42 26 Manappuram Jewellers Pvt. Ltd. v. Kerala Gold & Silver Dealers Association, Case No. 13 of
2011, Decided on, 23.04.2012.